Anz Commodity Trading Pty Ltd v. Cheuk Kwan Hung

HCMP 489/2021
HCCL 4/2017
(heard together)

[2025] HKCFI 2292

HCMP 489/2021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 489 OF 2021

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AND

HCCL 4/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 4 OF 2017

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J U D G M E N T

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1.By a judgment handed down in HCMP 489/2021 on 2 July 2021 (“Judgment”), this Court found the Defendant to be in contempt of Court, for breach of an order made by Anthony Chan J on 3 December 2020 (in HCCL 4/2017), for disclosure of documents in her possession, custody or power (“Discovery Order”), and of the subsequent orders made by the court extending time for compliance with the Discovery Order (collectively referred to as the “Orders”). The facts and findings have been set out in the Judgment, which are now accepted by the Defendant (although she was not present at the hearing on 2 July 2021).

2.Today is the adjourned hearing for the parties’ submissions on the appropriate penalty to be made for the Defendant’s admitted contempt, and for consideration of the Plaintiff’s costs.

3.The contempt proceedings were initiated in April 2021. The Defendant did not appear at the hearing of the contempt proceedings on 2 July 2021, but the Court was satisfied that the notice of hearing and the documents in support had all been served on her, pursuant to an order for substituted service granted after various unsuccessful attempts of service had been made. Having found the Defendant to be in contempt, an order was made on 2 July 2021 for warrants to be issued for the Defendant’s arrest, so that she could be brought before the Court to be heard on penalty. It was only on 15 September 2023 that the Defendant was located and arrested, brought before the Court, and then released on bail.

4.On 11 December 2024, after the Defendant had been refused legal aid and had appointed her own solicitors, she filed her affirmation. In the affirmation, she tendered her apology to the Court for having breached the Orders, explained the reason for her breach, and set out the efforts she had made to remedy the breach. She also set out her personal and mitigating circumstances.

5.The Defendant made a further affirmation on 21 May 2025, exhibiting the correspondence exchanged between her lawyers and those acting for the Plaintiff on the question of the Defendant’s cooperation with the Plaintiff.

6.I have carefully considered the Defendant’s affirmations. However, I do not accept the submission that the Defendant’s breach of the Orders was not intentional or deliberate, or that she had not “directly intended” to disobey the Orders of the Court, as alleged.

7.On the evidence, those acting for the Plaintiff had made repeated attempts to contact the Defendant by making calls and sending WhatsApp messages to the Defendant via her last known mobile telephone number. The Defendant’s telephone number was only cancelled around 22 April 2020, after telephone calls had been made by the Plaintiff’s agents to the number. When the process servers attempted to serve the Defendant at her address, the calls were answered by persons who were believed to be the Defendant’s relatives. I accept the Plaintiff’s submissions, that the evidence suggests that the Defendant had deliberately evaded service of documents relating to the making of the Orders, and had evaded compliance with the Orders.

8.On the Defendant’s own evidence, she was aware that legal proceedings had been commenced against her former employer (the 2^nd Defendant in the main action, HCCL 4/2017 (“2^nd Defendant”)), but she had “mistakenly and foolishly thought that (she) could disregard (the Orders)” because she was merely a clerk who no longer worked for the 2^nd Defendant, and because she had nothing to disclose. She claimed that she failed to seek timely legal advice, had misunderstood the consequences of ignoring the Orders and had foolishly under-estimated such consequences.

9.I accept the submissions made for the Plaintiff, that the above cannot be accepted as evidence that the Defendant lacked the intention to breach and ignore the Orders, or even as mitigation of her deliberate contempt. It was pointed out that the Orders were endorsed with a Penal Notice, which clearly stated the criminal consequences of any failure to comply with the Orders.

10.The Defendant’s Counsel also accepts that the Defendant’s ignorance of the legal consequences of her action is no defence.

11.It can only be said that the Defendant’s intentional disregard and willful breach of the Orders is due to her foolishness and ignorance.

12.The fact that the documents specified in the Orders were no longer in the possession, custody or control of the Defendant is certainly not a reason or excuse for the non-compliance with the Orders. If that was true, then the Defendant could simply have filed an affidavit to state so, upon being served with the Orders.

13.I have duly taken note of the fact that the Defendant did make efforts to purge her contempt in December 2023 and April 2025, by giving access to the email account of Dean her former employer, and by providing information of the 4^th Defendant in HCCL 4/2017.

14.However, the Defendant’s attempts to cooperate with the Plaintiff were only made after the arrest and release on bail in 2023. The Plaintiff pointed out that these attempts, like the Defendant’s admission of guilt, were belated - 2 years after the Orders were made, when the purpose of such Orders was to secure timely disclosure of online data such as emails, before the trial of the main action. On behalf of the Plaintiff, it was pointed out that the purpose of the Orders had been entirely defeated, and that the Defendant’s attempts to cooperate in 2023 and 2025 offered no meaningful atonement, nor could such attempts eradicate the effects of the Defendant’s breach.

15.The fact that it transpired, in December 2023 and April 2025, that the Defendant did not have access to documents or information which could have assisted the Plaintiff in HCCL 4/2017, and the fact that the Plaintiff was ultimately able to obtain judgment against the 2^nd Defendant in HCCL 4/2017, do not excuse or justify the Defendant’s disregard of the Orders.

16.As pointed out in the established authorities, a prime consideration of the court in sentencing for contempt is to signal the importance of demonstrating to litigants that orders of the court are to be obeyed (Suzanne Ruth Henderson v Scott Henderson HCMP 2016/2014, 14 April 2016; Abu Dhabi National Tanker Co v Lam Ming Chi [1998] 4 HKC 320). The purpose of the law of contempt is to prevent interference with the due administration of justice, and to maintain the authority of and public confidence in the courts (Chu Kong v Sun Min (2022) 25 HKCFAR 318). There is a strong public interest to ensure that orders of the court should not be flouted, although the individual circumstances of each case must always be evaluated. Imprisonment should be regarded as a sanction of last resort.

17.In this case, despite the fact that there was a willful and deliberate breach of the Orders, I have taken into consideration the personal and family circumstances of the Defendant. When the Defendant worked for the 2^nd Defendant in HCCL 4/2017, she was a mere clerk with menial duties responsible (on her evidence) mainly for filing, and a monthly salary of HK$15,000. Her role in the business operation and activities of the 2^nd Defendant would have been negligible. She is now a full-time housewife, who has to care for 3 young daughters, with little help from her mother who suffers from depression. Her husband is the sole breadwinner of the family, and his monthly income is HK$30,000.

18.The Defendant spent 4 days in custody after her arrest in September 2023, and she professes that she has learned her lesson, that court orders must be obeyed and taken seriously. She even accepts liability to pay the Plaintiff’s legal costs on indemnity basis, which will be a sufficiently onerous burden on the Defendant and her family.

19.Considering all the circumstances of this case, a custodial sentence is not warranted. In my judgment, it would be more appropriate to impose a fine or an order with financial consequences for the Defendant’s contempt.

20.The Plaintiff seeks costs of the contempt proceedings, as part of the penalty. Counsel accepts that contempt proceedings do not automatically attract an order for indemnity costs, although it is the usual order made when contempt is found (citing Navig8 Chemical Pools Inc v Inder Sharma unreported, HCMP 2885/2016, 14 February 2017, and Lau Yee Ching v Wong Tak Kwong, unreported, CACV 385/2005, 3 March 2006). In Lau Yee Ching, Rogers VP pointed out that the complainant in committal proceedings stands to gain very little other than the enforcement of the order which is the subject of the committal proceedings, but that the bringing of expensive contempt proceedings is for the benefit of the court, because the orders of the courts should be enforced and adhered to.

21.Costs are always in the discretion of the Court.

22.Without diminishing the value of contempt proceedings and their primary purpose of maintaining the authority of the court, a plaintiff would be expected to exercise reasonable judgment in deciding whether to pursue contempt proceedings against employees of a defendant alleged to be the party in breach or to be involved in misconduct or wrongdoing.

23.Bearing in mind the personal circumstances of this Defendant, the clerical and relatively minor role she played in the 2^nd Defendant’s business and activities, it would be unduly harsh to impose a substantial fine or liability for a significant sum of legal costs. I agree that the 4 days the Defendant spent in custody in September 2023 is adequate penalty for her disobedience and disregard of the Orders out of foolishness. In my judgment, I will only order her to contribute a sum of HK$50,000 towards the Plaintiff’s costs to be paid into court within 21 days. In default of payment, she shall be committed to prison for 2 days. The bail conditions previously ordered are discharged.

Mr Philip CL Wong, instructed by Holman Fenwick Willan, for the plaintiff (in both HCMP 489/2021 & HCCL 4/2017)

Mr Conan Shek, instructed by CPH Legal, for the defendant in HCMP 489/2021 (The defendant in HCMP 489/2021 = a non-party in HCCL 4/2017)